The use and distribution of product samples and promotional incentives are common tools utilized by manufacturers and retailers in their marketing efforts. Generally, these materials are of two separate and distinct classes:
(i) product samples, in which the manufacturer or retailer desires to obtain consumer "trial" of the product. Such use is commonly referred to as "sampling"; PA1 (ii) premiums, marketing incentives and promotional items, used to encourage prospective consumers to purchase a particular product or exhibit some other desired behavior, such as loyalty to a particular brand in order to receive something of value. Such items are referred to herein collectively as "premiums". PA1 (i) inefficiency in limiting delivery of the sample or premium to the target audience. Providing a sample to someone who is not a bona fide prospective purchaser is a wasted expense. Providing a premium to someone who has not done the necessary things to earn the premium is also a waste. The objective is the limitation of distribution of samples and premiums to those who are "qualified" to receive them. Qualification is discussed further below. PA1 (ii) The availability and cost of the means of immediate delivery of the sample or premium to the individual so qualified. PA1 Loyalty PA1 Promotion PA1 Competition PA1 Accurate determination of eligibility of individual consumers to receive the premium, on the spot. PA1 Delivery of the premium at the same time the purchase occurs. PA1 Flexibility to deliver a premium that is not an on-the-shelf item of the establishment. (Note that, premiums are not items otherwise available for purchase in the retailer's establishment. Such items would properly be considered "samples", not "premiums"). PA1 The creation of no incremental burden to the retailer. PA1 Must be cost effective. PA1 Attempted solution: place premium inside the package. PA1 Attempted solution: Mail in coupons, proofs of purchase. PA1 Attempted solution: Bundling the premium with the items to be purchased.
Both sampling and premiums are highly effective in accomplishing their respective objectives. Both, however, are burdened with significant costs and inefficiencies having the combined effect of reducing or eliminating their use, as detailed further below. As a result, manufacturers and retailers are denied an otherwise effective means of introducing new products to consumers and/or encouraging consumers to be loyal, frequent buyers.
Manufacturers and retailers have most often attempted to overcome these obstacles through the use of coupons. Consumers are well aware of the use of "cents-off" or discount coupons to encourage the purchase of products they are familiar with. However, while commonly used, coupons are an inefficient method of encouraging consumers to use the manufacturer's products, as the industry standard redemption rate of less than 2% testifies. Further, coupons are an inferior method of obtaining consumer "trial" of a new product. It is widely understood that product samples placed in the hands of consumers who evidence a need or desire for the product is the single most effective method for obtaining new product "trial". See, 1997 Annual Report of the Promotion Industry, Promo, The Magazine of Promotion Marketing, July, 1997; Cox Direct 19.sub.th Annual Survey of Promotional Practices, p. 51; Brand Marketing, August 1997; The New York Times, sec. 3 p.1, Sunday, Aug. 24, 1997.
Manufacturers and retailers spend billions of dollars annually on consumer promotions and advertising. Notwithstanding the amount spent, data is not generally available on a real-time, broad-market basis, to analyze for guidance in structuring those promotional and advertising expenditures. As a result, efficiency in those expenditures suffers with harm to manufacturers, retailers and consumers.